Determinants of Environmental Degradation under the Perspective of Globalization: A Panel Analysis of Selected MENA Nations

Audi, Marc and Ali, Amjad (2018): Determinants of Environmental Degradation under the Perspective of Globalization: A Panel Analysis of Selected MENA Nations.

Abstract

This paper has examined the determinants of environmental degradation under the perspective of globalization in the case of selected MENA nations (Jordan, United Arab Emirates, Saudi Arabia, Algeria, Qatar, Lebanon, Egypt, Bahrain, Iran, Morocco, Israel, Kuwait, Oman and Tunisia) over the period of 1980 to 2013. ADF - Fisher Chi-square, Im, Pesaran and Shin W-stat, Levin, Lin & Chu t*, and PP-Fisher Chi-square unit root tests are used for analyzing the stationarity of the variables. This study uses Panel ARDL approach for analyzing the co-integration among the variables. The causality between the variables is checked with the help of Granger Causality/Block Exogeneity Wald Tests. The estimated results of the study show that consumption of energy, economic growth, globalization and density of population have significant and positive relation with quality of environment in case of MENA nations. The results of this study show that most of the independent variables have causal relation with environmental degradation over the selected time period. The study concludes that inverted U-shaped KEC is not existed in the case of MENA nations.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic development, population density, Globalization, environmental degradation
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

References

Acharyya, J. (2009). FDI, growth and the environment: Evidence from India on CO2 emission during the last two decades. Journal of economic development, 34(1), 43.

Ali, A. & Audi, M. (2016). The Impact of Income Inequality, Environmental Degradation and Globalization on Life Expectancy in Pakistan: An Empirical Analysis. International Journal of Economics and Empirical Research, 4(4), 182-193.

Antweiler, W., Copeland, B. R., & Taylor, S. M. (2001). Agyeman, Julian, Environmental Justice and Sustainability, in Atkinson/Dietz/Neumayer (eds), Handbook of Sustainable Development, Cheltenham, UK/Northampton, MA, USA: Edward Elgar 2007, reprinted 2008, 171–188 Alam, Shawkat, Sustainable Development and Free Trade, Institutional Approaches, London/New York: Routledge 2008 (Alam, 2008). Environment, 91, 877-908.

Apergis, N., & Payne, J. E. (2010). Renewable energy consumption and economic growth: evidence from a panel of OECD countries. Energy policy, 38(1), 656-660.

Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.

Audi, M. & Ali, A. (2017). Environmental Degradation, Energy consumption, Population Density and Economic Development in Lebanon: A time series Analysis (1971-2014). Journal of International Finance and Economics 17(1), 7-20.

Baek, Y. W., & An, Y. J. (2011). Microbial toxicity of metal oxide nanoparticles (CuO, NiO, ZnO, and Sb 2 O 3) to Escherichia coli, Bacillus subtilis, and Streptococcus aureus. Science of the Total Environment, 409(8), 1603-1608.

Brajer, V., Mead, R. W., & Xiao, F. (2011). Searching for an Environmental Kuznets Curve in China's air pollution. China Economic Review, 22(3), 383-397.

Brown, K., & Westaway, E. (2011). Agency, capacity, and resilience to environmental change: lessons from human development, well-being, and disasters. Annual review of environment and resources, 36.

Byard, D., Li, Y., & Yu, Y. (2011). The effect of mandatory IFRS adoption on financial analysts’ information environment. Journal of accounting research, 49(1), 69-96.

Carson, R. T., Jeon, Y., & McCubbin, D. R. (1997). The relationship between air pollution emissions and income: US data. Environment and Development Economics, 2(4), 433-450.

Copeland, B. R., & Taylor, M. S. (2004). Trade, growth, and the environment. Journal of Economic literature, 42(1), 7-71.

De Bruyn, S. M., van den Bergh, J. C., & Opschoor, J. B. (1998). Economic growth and emissions: reconsidering the empirical basis of environmental Kuznets curves. Ecological Economics, 25(2), 161-175.

Dean, J. M. (2002). Does trade liberalization harm the environment? A new test. Canadian Journal of Economics/Revue canadienne d'économique, 35(4), 819-842.

Diao, X. D., Zeng, S. X., Tam, C. M., & Tam, V. W. (2009). EKC analysis for studying economic growth and environmental quality: a case study in China. Journal of Cleaner Production, 17(5), 541-548.

Dinda, S. (2006). Globalization and Environment: Can Pollution Haven Hypothesis alone explain the impact of Globalization on Environment?

Du, Z., Hu, B., Shi, A., Ma, X., Cheng, Y., Chen, P., ... & Ruan, R. (2012). Cultivation of a microalga Chlorella vulgaris using recycled aqueous phase nutrients from hydrothermal carbonization process. Bioresource technology, 126, 354-357.

Ekins, P. (1997). The Kuznets curve for the environment and economic growth: examining the evidence. Environment and planning a, 29(5), 805-830.

Ellis, W. C., Tran, C. T., Roy, R., Rusten, M., Fischer, A., Ryabov, A. D., ... & Collins, T. J. (2010). Designing green oxidation catalysts for purifying environmental waters. Journal of the American Chemical Society, 132(28), 9774-9781.

FAO (1994). Livestock, recognizing their role in sustainable agriculture, FAO, Rome, Italy.

Fodha, M., & Zaghdoud, O. (2010). Economic growth and pollutant emissions in Tunisia: an empirical analysis of the environmental Kuznets curve. Energy Policy, 38(2), 1150-1156.

Frankel, J. A. (2009). Environmental effects of international trade.

Frankel, J. A., & Rose, A. K. (2005). Is trade good or bad for the environment? Sorting out the causality. The Review of economics and statistics, 87(1), 85-91.

Friedl, B., & Getzner, M. (2003). Determinants of CO 2 emissions in a small open economy. Ecological economics, 45(1), 133-148.

Galeotti, M., Lanza, A., & Pauli, F. (2006). Reassessing the environmental Kuznets curve for CO 2 emissions: a robustness exercise. Ecological economics, 57(1), 152-163.

Govindaraju, V. C., & Tang, C. F. (2013). The dynamic links between CO 2 emissions, economic growth and coal consumption in China and India. Applied Energy, 104, 310-318.

Govindaraju, V. C., & Tang, C. F. (2013). The dynamic links between CO 2 emissions, economic growth and coal consumption in China and India. Applied Energy, 104, 310-318.

Granger, C. W. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica: Journal of the Econometric Society, 424-438.

Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement (No. w3914). National Bureau of Economic Research.

Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. The quarterly journal of economics, 110(2), 353-377.

Halkos, G. E., & Tzeremes, N. G. (2013). A conditional directional distance function approach for measuring regional environmental efficiency: Evidence from UK regions. European Journal of Operational Research, 227(1), 182-189.

He, J., Hoyano, A., & Asawa, T. (2009). A numerical simulation tool for predicting the impact of outdoor thermal environment on building energy performance. Applied Energy, 86(9), 1596-1605.

Heil, M. T., & Selden, T. M. (2001). Carbon emissions and economic development: future trajectories based on historical experience. Environment and Development Economics, 6(1), 63-83.

Holtz-Eakin, D., & Selden, T. M. (1995). Stoking the fires? CO 2 emissions and economic growth. Journal of public economics, 57(1), 85-101.

IEA (2008): World Energy Outlook 2008, International Energy Agency (IEA), OECD, Paris,

Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), 53-74.

Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), 53-74.

Ives, J. D., & Messerli, B. (1989). The Himalayan dilemma: reconciling development and conservation. Psychology Press.

Jagannathan, N. V., & Mundial, B. (1989). Poverty, public policies and the environment. In Environment Working Paper (No. 24). World Bank.

Jalil, A., & Mahmud, S. F. (2009). Environment Kuznets curve for CO 2 emissions: a cointegration analysis for China. Energy Policy, 37(12), 5167-5172.

Jaunky, V. C. (2011). The CO 2 emissions-income nexus: evidence from rich countries. Energy Policy, 39(3), 1228-1240.

Jayanthakumaran, K., Verma, R., & Liu, Y. (2012). CO 2 emissions, energy consumption, trade and income: a comparative analysis of China and India. Energy Policy, 42, 450-460.

Junyi, S. H. E. N. (2006). A simultaneous estimation of environmental Kuznets curve: evidence from China. China Economic Review, 17(4), 383-394.

Kaufmann, R. K., Davidsdottir, B., Garnham, S., & Pauly, P. (1998). The determinants of atmospheric SO 2 concentrations: reconsidering the environmental Kuznets curve. Ecological economics, 25(2), 209-220.

Köhler, M. O., Rädel, G., Shine, K. P., Rogers, H. L., & Pyle, J. A. (2013). Latitudinal variation of the effect of aviation NO x emissions on atmospheric ozone and methane and related climate metrics. Atmospheric environment, 64, 1-9.

Kraft, J., & Kraft, A. (1978). On the relationship between energy and GNP. The Journal of Energy and Development, 401-403.

Kukla-Gryz, A. (2009). Economic growth, international trade and air pollution: A decomposition analysis. Ecological economics, 68(5), 1329-1339.

Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of econometrics, 108(1), 1-24.

Levinson, A., & Taylor, M. S. (2001). Trade and the environment: unmasking the pollution haven effect. Unpublished manuscript, US National Science Foundation.

Levinson, A., & Taylor, M. S. (2008). Unmasking the pollution haven effect. International economic review, 49(1), 223-254.

Liddle, B. (2001). Free trade and the environment-development system. Ecological economics, 39(1), 21-36.

Lise, W. (2006). Decomposition of CO 2 emissions over 1980–2003 in Turkey. Energy Policy, 34(14), 1841-1852.

Liu, J., Dietz, T., Carpenter, S. R., Folke, C., Alberti, M., Redman, C. L., ... & Taylor, W. W. (2007). Coupled human and natural systems. AMBIO: a journal of the human environment, 36(8), 639-649.

Low, P., & Yeats, A. (1992). Do" dirty" industries migrate? World Bank Discussion Papers [WORLD BANK DISCUSSION PAPER.]. 1992.

Managi, S., & Jena, P. R. (2008). Environmental productivity and Kuznets curve in India. Ecological Economics, 65(2), 432-440.

Managi, S., Hibiki, A., & Tsurumi, T. (2009). Does trade openness improve environmental quality? Journal of environmental economics and management, 58(3), 346-363.

Mani, M., & Wheeler, D. (1998). In search of pollution havens? Dirty industry in the world economy, 1960 to 1995. The Journal of Environment & Development, 7(3), 215-247.

McAusland, C. (2008). Trade, politics, and the environment: Tailpipe vs. smokestack. Journal of Environmental Economics and Management, 55(1), 52-71.

McConnell, K. E. (1997). Income and the demand for environmental quality. Environment and development Economics, 2(4), 383-399.

Mink, S. (1993). Poverty and the environment. Finance and Development, 30, 8-8.

Moomaw, W. R., & Unruh, G. C. (1997). Are environmental Kuznets curves misleading us? The case of CO2 emissions. Environment and Development Economics, 2(4), 451-463.

Ozturk, I., & Acaravci, A. (2010). CO 2 emissions, energy consumption and economic growth in Turkey. Renewable and Sustainable Energy Reviews, 14(9), 3220-3225.

Perman, R., & Stern, D. I. (2003). Evidence from panel unit root and cointegration tests that the environmental Kuznets curve does not exist. Australian Journal of Agricultural and Resource Economics, 47(3), 325-347.

Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of econometrics, 68(1), 79-113.

Pesaran, M. H., & Smith, R. (1995). The role of theory in econometrics. Journal of Econometrics, 67(1), 61-79.

Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621-634.

Phillips, P. C., & Moon, H. R. (2000). Nonstationary panel data analysis: an overview of some recent developments. Econometric Reviews, 19(3), 263-286.

Protocol, K. (1997). United Nations framework convention on climate change. Kyoto Protocol, Kyoto, 19.

Rothman, D. S. (1998). Environmental Kuznets curves—real progress or passing the buck? a case for consumption-based approaches. Ecological economics, 25(2), 177-194.

Saboori, B., Sulaiman, J., & Mohd, S. (2012). Economic growth and CO 2 emissions in Malaysia: a cointegration analysis of the environmental Kuznets curve. Energy Policy, 51, 184-191.

Selden, T. M., & Song, D. (1995). Neoclassical growth, the J curve for abatement, and the inverted U curve for pollution. Journal of Environmental Economics and management, 29(2), 162-168.

Shafik, N. (1994). Economic development and environmental quality: an econometric analysis. Oxford economic papers, 757-773.

Shahbaz, M., Khan, S., Ali, A., & Bhattacharya, M. (2017). The Impact of globalization on CO2 emissions in China. The Singapore Economic Review, 62(04), 929-957.

Shahbaz, M., Khraief, N., Uddin, G. S., & Ozturk, I. (2014). Environmental Kuznets curve in an open economy: A bounds testing and causality analysis for Tunisia. Renewable and Sustainable Energy Reviews, 34, 325-336.

Shahbaz, M., Mutascu, M., & Azim, P. (2013). Environmental Kuznets curve in Romania and the role of energy consumption. Renewable and Sustainable Energy Reviews, 18, 165-173.

Shahbaz, M., Ozturk, I., Afza, T., & Ali, A. (2013). Revisiting the environmental Kuznets curve in a global economy. Renewable and Sustainable Energy Reviews, 25, 494-502.

Shahbaz, M., Solarin, S. A., Mahmood, H., & Arouri, M. (2013). Does financial development reduce CO 2 emissions in Malaysian economy? A time series analysis. Economic Modelling, 35, 145-152.

Song, K., Liu, D., Wang, Z., Zhang, B., Jin, C., Li, F., & Liu, H. (2008). Land use change in Sanjiang Plain and its driving forces analysis since 1954. ACTA GEOGRAPHICA SINICA-CHINESE EDITION-, 63(1), 93.

Southgate, D. D. (1988). economics of land degradation in the Third World.

Southgate, D., & Pearce, D. W. (1988). Agricultural colonization and environmental degradation in frontier developing economies. World Bank Policy Planning and Research Staff, Environment Department.

Spangenberg, J. H. (2001). The environmental Kuznets curve: A methodological artefact? Population and Environment, 23(2), 175-191.

Stern, D. I., Common, M. S., & Barbier, E. B. (1996). Economic growth and environmental degradation: the environmental Kuznets curve and sustainable development. World development, 24(7), 1151-1160.

Suri, V., & Chapman, D. (1998). Economic growth, trade and energy: implications for the environmental Kuznets curve. Ecological economics, 25(2), 195-208.

Takeda, F., & Matsuura, K. (2006). Trade and the Environment in East Asia: Examining the Linkages with Japan and the USA. The Journal of the Korean Economy, 7(1), 33-56.

Tapio, P., Banister, D., Luukkanen, J., Vehmas, J., & Willamo, R. (2007). Energy and transport in comparison: Immaterialisation, dematerialisation and decarbonisation in the EU15 between 1970 and 2000. Energy policy, 35(1), 433-451.

Temurshoev, U. (2006). Pollution haven hypothesis or factor endowment hypothesis: theory and empirical examination for the US and China.

Tiwari, A. K., Shahbaz, M., & Hye, Q. M. A. (2013). The environmental Kuznets curve and the role of coal consumption in India: cointegration and causality analysis in an open economy. Renewable and Sustainable Energy Reviews, 18, 519-527.

Vollebergh, H. R., & Kemfert, C. (2005). The role of technological change for a sustainable development. Ecological Economics, 54(2), 133-147.

Von Moltke, A., C. McKee, and T. Morgan (2004): Energy Subsidies: Lessons Learned in Assessing their Impact and Designing Policy Reforms, She_eld: Greenleaf Publishing.

Xu, J., Meng, W., Zhang, Y., Li, L., & Guo, C. (2011). Photocatalytic degradation of tetrabromobisphenol A by mesoporous BiOBr: efficacy, products and pathway. Applied Catalysis B: Environmental, 107(3), 355-362.

Yaguchi, Y., Sonobe, T., & Otsuka, K. (2007). Beyond the environmental Kuznets curve: a comparative study of SO 2 and CO 2 emissions between Japan and China. Environment and Development Economics, 12(3), 445-470.

Zhang, X. P., & Cheng, X. M. (2009). Energy consumption, carbon emissions, and economic growth in China. Ecological Economics, 68(10), 2706-2712.